Kaspersky Gets Awful Patent Troll To Pay Up To Drop Its Own Case

from the nicely-done dept

We've talked a lot over the years about the importance of standing up to patent trolls. Newegg, famously, has its "Never Settle" mantra for dealing with patent trolls. And we covered the case of Fark's Drew Curtis, a few years back, who simply refused to give in when a patent troll tried to shake him down. Part of that standing firm was that when he eventually "settled" the case, he demanded that he be allowed to reveal that the settlement was for $0 (usually trolls require a gag clause on settlements to avoid anyone finding out what happened). But it appears Kaspersky Labs has taken this up a notch.

Two years ago, we wrote about the patent troll with the somewhat on-the-nose name of Wetro Lan (get it? "we trollin'") that was threatening lots of companies. One company it went after was Kaspersky Labs, which it eventually sued in East Texas (naturally). Things didn't quite go according to Wetro Lan's plan. As Joe Mullin at Ars Technica explains, by the end of the case, Wetro Lan had to pay Kaspersky to get the company to agree to let the case die.

During discovery, Kaspersky's lawyer was able to discover the settlements that Wetro Lan actually got out of other companies, while also making it quite clear to Wetro Lan, that it's claims in this suit were completely bogus. So then it flipped the script:

"Their patent was for a firewall that's not user-configurable," Kniser said in an interview with Ars. "They knew ours was configurable. So they started taking weird positions, basically saying, 'Well, you can only configure it a little bit.' I think that would have gotten them in trouble as far as [patent] validity goes."

Wetro Lan's settlement demands kept dropping, down from its initial "amicable" demand of $60,000. Eventually, the demands reached $10,000—an amount that's extremely low in the world of patent litigation. Kniser tried to explain that it didn't matter how far the company dropped the demand. "Kaspersky won't pay these people even if it's a nickel," he said.

After some back-and-forth, Wetro Lan's lawyer agreed to pay Kaspersky $5,000 to end the litigation. Papers were filed Monday, and both sides have dropped their claims.

Eugene Kaspersky, in his own blog post on the case, explains the importance of fighting patent trolls, and how this went down, noting that it was pretty clear that Wetro Lan's lawyers knew "precious little" about what they were actually suing over and also that they "appear to have an incomplete knowledge of IP law." Recognizing that once Kaspersky had the upper hand and knew it would win, any time wasted in court was lost money to Wetro Lan -- hence the offer to "settle" the case only if Wetro Lan paid them. Wetro immediately offered a $2,000 price instead, before they settled on $5,000.

And again, fighting patent trolls and being able to talk about the details of the victory are key:

Another notch on our bridge – representing the number of victories against patent extortionists. The score now: 5:0. That’s not including the 23 out-of-court settlements (crucially: in which we paid zero dollars), nor the untold numbers of ‘just try it!’ letters we’ve sent back to trolls who then promptly crawl back under their bridges.

Score: 5:0; total sum paid to patent trolls: $0.

These are very unusual results in the USA. Accordingly, they’re results that tend to keep the shrewder trolls off our back. The less shrewd, however, still keep coming, not even taking the time to find out about our successful anti-troll reputation – or even just our basic anti-troll slogan: ‘We fight them to the last bullet – their last bullet’. Perhaps if they did they too would stay away. But they don’t. So they get stung.

It's still a hollow victory. Kaspersky could have taken it to court and gotten the patent invalidated. They didn't, so this leaves Wetro Lan free to shakedown other companies who may be unable to fight/argue back. I'm not blaming Kaspersky for this per se -- they have to look after themselves too. And it's commendable that Kaspersky didn't just capitulate. But the victory itself remains hollow.

Re: Re:

So it seems they were confident the patent didn't apply to them but they were not confident it was actually an invalid patent.

As fun as it would be to get a troll to abandon their patent as part of a settlement, or to get a court to invalidate it, it's always easier (cheaper) to say it doesn't apply at all. But the key part of that sentence is "they knew"---the implication being that Kaspersky was going to make a bad-faith argument in court and the troll would pay all their legal costs (much higher than the $5000 settlement).

Being confident that the patent is invalid isn't enough. They'd also have to be confident the jury, and any appeals courts, would agree; and that all would agree the troll was acting in bad faith, because it'll cost much more money to fight this in court and "bad faith" is the only way to get the troll to cover those costs.